Dixon County, Nebraska - Chapter 12, 1896

Railroad Rumblings The Building of the Short Line- The Extension of the Ponca Branch to New Castle The Burning of the Mill at Ponca --The Failure of the First National Bank --The Starting of Allen, Concord, Waterbury and New Castle.

The life of a county, like that of an individual, is generally made up of a succession of little events, scarcely one of which, detached from the others, would be worth mentioning;. This fact has thus far appeared in this as in every other history, and without doubt wTill be seen in the future. The small incidents separately not of much account, which occur in the course of a month or a year, make up the great bulk of its history, out of which arises, at rare intervals like a solitary rock on the prairie, some conspicious event of real importance.

Looking back from the commencement of 1887 we saw the growth of business up to that time had been rapid. As a sample, take the railroad business at Ponca, The total amount of freight received at that station during the year 18S5 was 8,981,628 pounds; during the year 1886 it was 10,- 159.419 pounds. Total amount of freight forwarded during the year 1885 was 9,703,013 pounds; during the year 1S86 it was 11,750,851. Total increase of tonnage 8,225,575. Gross earnings of station for 1885 was $44,451.18; for year 1886 was $49,968.35, an increase of $5,517.17 in station earnings. Such an amount showed that the people of the northern part of the county who sent or received it, were not idle. Nearly the same amount of business was done at Wakefield, indicating altogether, as reliably as a barometer of the weather, the condition of business in the county.

In 1887, as in 1SS6, there were innumerable rumors of new railroad prospects affecting Dixon county. Parties of railroad surveyors would pass through, diligently running lines and driving stakes, but answering no questions. Some came from the southwest and others from Sioux City. The Springbank region frequently had hope excited by the sight of such surveyors in all the panoply of compasses, levels, transits and chains, moving to and fro. Surveyors claiming to be from North Platte ran a line along the Otter Creek valley and soon after was followed by Union Pacific surveyors over the same ground, and another surveying outfit was seen measuring and staking its way along the valley of Elk Creek. Surveyors ran a line from Clairmont station in Cedar county, down Tarbox Hollow, so called, to the South Creek valley and from thence to Martinsburg and Ponca. Others came down Daily valley to Martinsburg and from there headed towards Sioux City leaving Ponca out in the cold. It was confidently asserted by those who claimed to know all about it, that the Union Pacific railroad would be extended from Norfolk to the Missouri river at Ponca and there by a bridge cross into Dakota. It was also said by others with equal confidence that the Union Pacific would not build such a line to Ponca but would branch off through Springbank and the Elk Valley to Jackson and from there to Covington. In such a multitude of reports, many of them conflicting, no one could tell which to believe. The safest way was not to believe any, and as matters turned out, such a general disbelief would have been the most correct method of dealing with the subject.

At the time of these rumors, a new excitement, not quite so important as the railroad stories but more interesting, was started by a man named Keyser, who claimed he had found a diamond. He had in fact found in Lime Kiln ravine a transparent stone, weighing about two ounces, but whether a genuine diamond or a diamond of the Alaska variety, was the question. If it were genuine, it was worth enough to build a railroad and a bridge across the Missouri, but if an Alaska diamond, it was not as valuable as an equally sized seed potato. Excited by the "-diamond" discovery, several parties went prospecting in the bluffs along the river for gold, and an enthusiastic resident of Ionia township claimed he had discovered a rich deposit of plumbago.

up a burlesque report that live large companies of railroad surveyors were approaching Ponca from as many different directions. The story in full, as it was told, although not exactly the right thing to put into the pages of a sedate history, will still be useful as showing what a healthy and vivid western imagination can do. as also the fact that people had in those days lots of fun occasionally. Here it is: "A large force of railroad engineers are now beating up the ground in "Tarbox Hollow." One of the engineers was heard to say to another that they 'would in 24 hours be where they could get their canteens tilled.' That, considering the direction they were moving and the time indicated, meant Ponca. Therefore the surveyors will soon be in Ponca.

"Another large crowd of surveyors are now advancing down South Creek, preceded by a full military band led by a drum major in the gorgeous custume of an Abyssinian prince. As they march along, the neighboring hills resound to the music of trumpets and shawms. A long line of wragons are carrying the surveying instruments and camp equipage. They will get to Ponca tomorrow.

"Two full corps of opposing railroad engineers are neck and neck running lines down Silver Creek. The needles of their compasses point toward Ponca. The chief engineers on sorrel horses ride in front cheering on their men. It is impossible to determine which will get there first.

"A company of forty surveyors approach by the way of New Castle. The chief engineer in the costume of a Turkish pasha, is leading the procession mounted on a burro and followed by a company of bespangled sword swallowers, ball tossers. wire dancers, tumblers and contortionists, who in their professional capacities entertain the party as it comes down the valley. After these comes a large platform or float on wheels drawn by a long train of oxen. On the float the surveyors are stationed with theodolites and other instruments, and determine as they move along, the heighth of the hills and all questions of grade, cut, till, etc.

Kiln ravine bridge matters and other fictioDS for boom purposes, furnished something to talk about while the crops were growing and the cattle on the thousand green hills and valleys were getting fat and ready for market. On the Fourth of July the various towns had their celebrations largely attended. There was building and improvement as usual and an increasing demand and higher prices for farms. The county fair in the fall was well attended and a big balloon and an oration from Hon. J. M. Thurston of Omaha were drawing attractions.

When at the end of the year Christmas and New Year's days came with the usual church decorations, gifts and reunions of families and friends, the citizens of the county had reason from the experiences of the past to face the future with confidence.

The commencement of the year 1888 was marked by the greatest blizzard (January \2) that this country ever saw since its settlement by white people. In this state as well as in Iowa, Dakota and Minnesota, the oldest inhabitants could remember nothing approaching it in severity. In ail, about two hundred and fifty persons were frozen to death and the loss of stock, especially in the western part of Nebraska, was very great. Dixon county came out of the ordeal much better than most localities. There was much suffering here and some narrow escapes by being caught out in the storm but none were frozen to death and the cattle were generally well sheltered and in safety.

During this year, as in the year before, there was a continuous succession of rumors and surmises on future railroad possibilities. In June a party of railroad surveyors commenced at Randolph, Cedar county, to run a line eastward towards Sioux City. When on their route the surveyors came to Dixon county, they ran various lines, so that scarely a valley in the central part of the county was not decorated with the stakes of a preliminary survey. One route crossed South Creek valley at Martinsburg and another several miles above. The lines came together at Mr. Herrick's place in Otter Creek valley where it was thought would be a railroad town. Where Tarbox Hollow opens into South Creek valley another town was deemed liable. If the Martinsburg route was followed, that village being near the cen- ter of the county, would become a place of importance. The final result of the various surveys was that the Sioux City and Ogden Short Line Railroad was located and built through the county.

In April, L889, contracts were let to build 100 miles of it. Work soon after commenced and in the spring of 1890 the track was completed through the county. On this part of the route three new towns were started. One of them, Allen, was on the farm of Henry Allen in Springbank township, about twenty-nine miles from Sioux City and twenty from Ponca.

Another town was on Mr. Herrick's land in Otter Creek township and on the eastern side of the county and was given the name of Waterbury. The third town located was Concord near the county's west line. All the three places had encouraging growth, and Allen, on account of its central location, might, it was claimed, become the county seat of the county.

The county thus, with these three additions, had nine thriving young cities, viz: Ponca, Wakefield, Martinsburg, Concord, Emerson, New Castle, Allen. Dixon and Waterbury, all of which excepting New Castle and Martinsburg were railroad towns.

In May, 1892, there were rumors that the C, St. P., M. & O. R. R. would soon be extended from Ponca to New Castle. In the course of a few months it was seen that the rumor would be a certainty. In September a committee of New Castle business men, the most prominent being Thomas Hoy. the leading merchant of that place, went to St. Paul, where they met President Hughitt and General Manager Winters of the Omaha company. They were given audiences by those gentlemen and made a statement of their case. They showed that the extension they asked would be a cheap one to build, and would be certain to secure enough business to be profitable. As a result of this interview, the Omaha people made a proposition to the New Castle men. They stated that if they made the extension they would have to buy about sixty-five acres of land for right-of-way and forty to fifty acres more at New Castle for yards, station room, etc. They did not place any figures on this property, but told the New Castle people to go back home and find out on what terms it could be secured. After they had done this if they would raise the money or secure donations enough to meet half the expense of purchasing it, the road would give serious consideration to the proposition for an immediate extension. The committee returned home and at once called a meeting to discuss ways and means for complying with the demand of the road. At such meeting subscriptions to the amount of $3,000 were secured. This promptness and energy on the part of Mr. Hoy and his friends resulted in the decision of the railroad company to make the extension.

Aside from these railroad matters which had occupied general attention for several years, the progress of the county had continued at its usual speed. There had been new enterprises and a long succession of good crops. People were in fact, if they but realized it, on the high road to wealth. and all that was required to attain it was industry, energy and a determination to avoid debt. A great number of new families had moved in and but few went away, and those who went some to California and others to Florida in nine times out of ten returned in a year to Dixon county more contented than ever before.

Life was not, however, without an occasional drawback. Sometimes we had too much rain or too little for the good of the crops and at long intervals a prairie fire or a heavy wind would do some damage. In the spring of '89 quite extensive prairie tires were in Silver Creek, Ponca, Ionia and Daily and occasioned much loss of property. These tires were not as bad as those that occurred a few years before, but they were bad enough.

The year 1893 was in some respects an unfortunate one for Ponca. Up to that time it had grown and prospered, and its good fortune for years had been uninterrupted. Hut this year a series of troubles came upon it, perhaps none that would materially interfere with its future prospects, but troubles which were discouraging and exasperating.

First, in February, the Ponca mill with its adjacent buildings and a great quantity of Hour and grain was burned. The night of the tire was extremely cold and disagreeable, and a tierce, catting gale blew from the northwest making the work of lighting the flames most difficult. The mill and contents, including 4,000 bushels of wheat and about four carloads of Hour, together with the elevator containing 14.000 bushels of wheat, and the dwelling, was a total loss, and the Hour house was practically destroyed, making a loss on the buildings of about $32,000 and on the grain and flour of $1*2,000. The mill and machinery had an insurance of $14,700 and the elevator was insured for $1,500, and there wras some insurance on the grain and flour.

The mill was built by John Stough, Sr. and S. P. Mikesell in 1882-83, and was operated by the founders until September 13, 1883, when S. K. Bitten bender was taken into partnership. The mill was incorporated in 1886 and was conducted from that time under the corporate name of Ponca Mill Co. It was distinguished as being one of the best constructed mills in the w7est, with every adjunct and improvement that would facilitate its work and enable the making of high grade flour for which it had an enviable reputation.

The main building, 40x60 feet, had four stories, and was built of stone and brick. The floors were of white oak and hard maple, and all of the spouting were hard dressed, beaded and shellaced, thus showing, in part, how well the structure was built. The machinery was of the ''long system style," and, always kept in repair, was by no means inferior to any modern mill. Its average yield, as shown by automatic scales, was forty-two pounds of flour for every bushel of cleaned wheat, which fact alone placed it among the best mills of the day. In fact it would be folly to try to build a better mill or one that would maintain a higher standard of effective work.

The mill usually ground 100,030 bushels per year and found a ready market in Nebraska. Iowa and South Dakota, and great quantities of flour were also furnished to the United States army as well as to the Indians in Dakota and Montana.

The system of waterworks which had been building in town was not yet fully completed and hence on the occasion of the Are was nearly useless.

notice was posted on the door of the bank stating that "owing to the recent failures in Sioux City and elsewhere, and being called upon for money due, the bank is compelled to close temporarily, and that depositors will be paid as soon as matters can be adjusted." It was hoped by depositors that the suspension was as stated in the notice, only temporary. The sworn statement made out under the supervision of the bank examiner the month before, showed conclusively that depositors were absolutely safe. Under that statement the resources of the bank were over $2(10.(100 and the indebtedness to the depositors about $100,000.

But notwithstanding the assertion of the entire safety of depositors, a thousand rumors were soon in circulation as to the cause of the failure and the amount of assets and liabilities. By some it was said that the bank was and had been for along' time hopelessly rotten, that depositors had been hoodwinked, and that their money had been unscrupulously used in extravagance and recklessness in transactions outside the legitimate business of the bank.

The man who seemed to have the most to do with the control and management of the bank up to the time of its failure was F. M. Dorsey. A few years before, he came to Ponca and opened a private bank in the name of Dorsey Brothers, and from that commencement the First National Bank was developed and Ex-Congressman (tco. W. E. Dorsey became president of it. F. M. Dorsey was a man whose extravagances, enterprises and expenses required a large amount of money. He built on Fast street a residence costing several thousand dollars. He had a large stable of fast horses, and was the main stay of the "Diamond Stock Farm." so called. He was also one of the leading managers of the "Ponca Driving and Fair Association," and in all respects appeared to be a "'high roller" with plenty of money at all times and always ready to expend it for his own gratification.

As receiver of the bank, Albert Watkins of Lincoln was appointed soon after the failure and immediately entered upon the duties of the office.

The failure of this bank created great distress among many. There was a large number of depositors, some of whom had placed in the bank every dollar they had in the world. They were old men and women and even children.

who deposited and lost their little savings, and starvation or the poor house seemed to be the only relief for them. As people began to believe that the wreck was caused by circumstances not beyond the coutrol of F. M. Dorsey and his coterie of sympathetic aiders, public indignation grew until almost unbearable.

In October a dividend of 20 per cent. wTas paid to the depositors. No farther dividends have been paid up to this time, (December. 1 S*)~> ) but it is hoped there will be.

Soon after this failure Dorsey was indicted in the United States Court at Omaha for falsifying the books of the bank and other charges, but thus far he has not been tried. A favorite method by which to get hold of the money of the bank was, as reported by those who claimed to know, the following: A man deposits $500 in the bank. Thereupon Dorsey goes to one of the hostlers in his stable or to some other subservient satellite, and gets him to sign a note for $500. This note is then endorsed "Dorsey Brothers," and discounted at the bank. Thus, Dorsey captures the $500 and the bank has the note. Then the bank sends the note to an eastern bank and it is re-discounted, and then the First National gets its $500 again. Then if Dorsey desires more money he can make another note and have it signed by some willing tool, and he is enabled to get hold of the $50(1 again. And so on ad infinitum. It was a great scheme and as long as eastern banks would re-discount western paper, was better than a first class gold mine.

What will ever be done with Dorsey. no one can tell. Had he been merely guilty of petit larceny, or if hunger had driven him to steal a loaf of bread, he would have been punished long ago. But in this country the maxim seems to be, "the greater the crime the greater the safety of the criminal." Dorsey did not stay in Ponca long after the failure but went to Sioux City where, amid society more congenial to him, he has since remained.

The hard times and the failure of the First National Bank brought about the downfall of the Ponca Driving and Fair Association. The track, a mile around it and the best in this part of the state, had been perfected by great labor and expense. A large number of costly buildings, amphi-

Another misfortune of the year was the burning in December of the Aoway Valley Creamery at Ponca. The building was a good one and had the latest and best machinery and improvements, and was doing an extensive business and giving employment to a large number of men during a part of each year.

The railroad was duly extended to New Castle in 1893. That ambitious and deserving young city is situated in the Aoway valley. The founder of the town was (lustavus Smith (or more properly, Schmidt) since deceased, who many years ago laid out the place and gave it its name.

In 1871 a few houses, mostly log, were all there was to New Castle. The "first store" was built by Mr. Smith in 1871 and was stocked by S. Reineman of Covington and managed by his brother, Albert. The venture was unsuccessful and the proprietors were numerous for the next ten years, of whom were Mr. Smith, S. B. Hughes and then Thos. Hoy. Mr. Hoy burned out, rebuilt, and sold a half interest to John Coleman. The firm of Hoy & Coleman did a fine business for a number of years, but dissolved about a year before, Mr. Hoy taking the stock, which he still owns and manages, and Mr. Coleman going into general hardware trade. The country around New Castle is among the most productive in the state and is settled by progressive and industrious farmers.

In the winter before the railroad was extended and before the "boom" struck New Castle, that town had not over ten or fifteen buildings all told, among which were two churches, Catholic and Congregational, and a school house. But during that winter, in anticipation of the expected road the place commenced to grow and soon iu the course of erection was a bank to be managed by W. P. Logan, of Ponca; a mill by Jas. B. Connery and Jas. McGrath with a capacity of fifty barrels per day; another hotel by W. H. Hopkins; two lumber yards; two livery barns; a saloon: a meat market, and last but not least a newspaper.

In January after the road was completed New Castle was a brisk and well built railroad town. Its growth since a year before had been constant and healthy and it now con- tained three large general stores, two drug stores, a grist mill, two hotels, a good newspaper, numerous shops, offices and dwelling houses.

Notwithstanding all the buffetting of ill fortune during 1893, Ponca at the end of that year and during 1894 had every appearance of being still in the ring and all right.

On September 13, 1S94. the pioneers and old settlers of the county held their first picnic. It was in Hurley's grove near Martinsburg and attended by about 8.000 people. At that time there was a permanent organization of the "Old Settlers and Pioneers' Society" of Dixon County. A constitution was adopted and the following officers were elected: C. F. Putnam, president; N. S. Porter, vice-president; George Herrick, treasurer, and C. W. Sehram, secretary.

The second annual picnic of the association was held at the same place, September 5, 1895, and the attendance was larger than the year before. The officers elected for the ensuing year were: President, David Murphy, of South Creek; vice-president, George Mattison, Ponca township; treasurer, (Jeo. Herrick. Otter Creek; secretary, C. W. Sehram, Silver Creek. On both these occasions orations, music and elegant picnic dinners made an enjoyable bill of fare. It is to be hoped these reunions, thus auspiciously commenced, will always be continued.